FOUR DECADES AND 50,000 HOMES LATER
AFTER A FAIRLY AVERAGE YEAR, THE HEAD OF AUSTRALIA’S LARGEST PRIVATE RESIDENTIAL LAND DEVELOPER CAN SEE BETTER TIMES AHEAD.
NIGEL SATTERLEY UNDERSTANDS, MORE THAN MOST,
the importance of a good fit. The former salesman of ladies hosiery and swimwear was the youngest distributor of Levi’s jeans in Western Australia at the ageof 20inthe 1960s, basinghis success on offering a higher level of personal service than his competitors.
However, it wasn’t long before Satterley figured out that he could make riches out of those rags by investing his weekly Levi’s commission in local real estate. Within 40 years, the Satterley Property Group became the country’s largest privately owned residential land developer. It has built more than 150 estates and sold more than 50,000 home sites in WA.
“I bought my first block of land [four hectares] in 1968 and made $10,000 when I sold it 10 months later,” says Satterley, who was made a Member of the Order of Australia in 2006. “That was a profit equivalent to the cost of two houses in those days.”
Shortly after that very profitable first purchase, Satterley crossed paths with a man who would play a pivotal role in his career. “I met Sir James McCusker [father of WA governor Malcolm McCusker]. Sir James and Malcolm founded the Town and Country Building Society, and it was Sir James who suggested that I concentrate on real estate full time.”
The result was Satterley’s first property company, Statesman Homes, which began securing land throughout Perth and its environs. “I began with $25,000 in capital, buying vacant lots and trading land. My first display homewas in Duncraig in 1970, the second was in Parkwood in 1971.”
By 1975, StatesmanHomes was selling 600 dwellings a year and soon became the state’s largest home builder. The rise in Perth’s population – from about 300,000 in the late 1960s to nudging 1.9 million today – has naturally worked in Satterley’s favour.
By 1980, he was ready to sell his interest in Statesman Homes and concentrate on feeding the newdemand for CBDapartments. “At the same time, I became a kind of real estate ‘ doctor’ for victims of the 1980 property downturn, finishing developments in commercial buildings on behalf of banks and receivers.”
A couple of years later, Satterley suggested to Sir James that the Town and Country Building Society consider moving into the land development business, as there was an opportunity to take a strong leadership role in the sector.
The first acquisition – 45 hectares inLeeming for $3.5 million, with roomfor 400 lots – proved a great success. The group went on to acquire land in the new suburb of Murdoch. It also formed a joint venture with the WADepartment of Housing at Alexander Heights and snapped up 100 hectares in Marangaroo. “That was the first private-sector land development on the eastern side of Wanneroo Road to be commercially successful,” Satterley says.
Satterley developments have won many awards (more than 80 to date). His blueprint for a successful community is simple: Give people what they want, what they can afford and a better place to live. “We identified early on that in many cases it was women who were the decision makers when it came to buying a property, so we made a virtue of providing schools, colleges, parks, shopping areas and a community building.”
Satterley views downturns such as the global financial crisis as opportunities, rather than as occasions for retrenchment and gloom. “In 1987, during the stockmarket crash, we acquired Halls Head in Mandurah – which turned out to be a great deal because 12 months later we had zero debt and 6500 750- square-metre residential blocks on the books at no cost.”
He has had many other great deals with sales to match (in one year, 650 lots were sold in the group’s Brighton development), all based on operating in a “very diligent, very careful, thoroughway”.
“In 1982, Sir James and I developed a risk-management strategy that we still apply today. The banks like us because of our low gearing, our well-managed projects and our approach to acquiring opportunities in a sensible way despite a generally depressed market. I believe you can always sell well-located land, no matter what the market is doing.” In business terms, Satterley would rate 2012 “six out of 10” and anticipates a 5 per cent pick-up in 2013. “There is plenty of competition and consumer confidence is slowly picking up.”